I have the best people. I have nothing without my team. I have good ideas and I have vision, and I do have creativity and innovation, but I don’t have the ability to do it all and nobody can. And so I focus very heavily … Have you read the book Traction? It’s a great book to read, but I don’t necessarily agree with the entire ecosystem that they put out, but I do agree with the way they define terms. And I think power in understanding terminology and words around things makes things clearer and helps people to see the way, the path to something. Two words that they utilise in that book frequently are visionary and integrator. I am a visionary and I have integrators on my team. And the integrator role is they’re truly the ones that are doing the hard work. It’s where I lay out the vision in a creative path for what I think should happen, and they make it happen. They make sure we get the right people in the right seats on our team. They make sure people are executing against our project plan, and they keep people accountable. Well, that gives me the opportunity to be creative and go write things and go speak at conferences and pursue the passions of growing the different brands and figuring out what to do next with that, and how we can be better.
Today I’m speaking with Liz Mason, CEO + Founder of multiple businesses including High Rock.
In this episode, we talk about . . .
- CPA World Domination
- Kaizen the Japanese philosophy of continuous improvement
- With creative ideas and giant goals, Liz explains how she manages to juggle so many big projects
- Measuring your value – how to price for Modern Practices.
- How to build an amazing team
- The complexities of accounting for the cannabis industry
- How to creatively compensate your team.
What’s the most dangerous thing you’ve ever done?
Liz Mason: Oh, that’s a great question. Well, first off, thank you so much for having me. I’m beyond excited to be joining you today. The most dangerous thing I’ve ever done. Well, it depends on your definition of dangerous. I’ve jumped out of aeroplanes , of course, with a parachute on.
Liz Mason: I went to rode in a pre-World War II cargo plane in Honduras that they basically had to strap us to the side of the plane, and it was a little shaky, and I think that was more scary than jumping out of a plane, I would say. I’ve gone bungee jumping. Yeah. Full on!
Heather Smith: That’s kind of few things. I thought you would be a bit of an adventurer.
Liz Mason: Rock climbing frequently.
Heather Smith: I thought you would be an adrenaline junkie.
Liz Mason: Indeed. Sorry. I spent my childhood as a downhill racer, so skiing. I think I just got a taste for it as a kid.
Can you share with our listeners a bit about your background?
Liz Mason: Absolutely. I started in traditional public accounting, went to university and got my degree in accounting and finance. Graduated, went to work for Grant Thornton as a 20 year old. Yep, I started when I was 20, before my 21st birthday.
Liz Mason: I went ahead and automated a piece of my job, which landed me a position with the National Tax Group in the US for Grant Thornton, which was awesome and an amazing experience, except for I was going around the country. At that point, I was 23 and telling older partners what to do and how to automate and how to utilise non-paper based systems.
Liz Mason: They didn’t take kindly to that, so I spent a year getting yelled at and told that I was an upstart that didn’t know what I was talking about. But at the same time, I got a taste for what automation could do and how technology could actually influence our profession.
Liz Mason: I went to work for RSM McGladrey after that and did a bunch of tax consulting work, which was a great foundation for me technically before going to a local firm and finally launching my own firm when I realised that nobody was utilising the technology that I thought they should be utilising. And people were not taking care of the humans in the way that I would have liked.
Heather Smith: Awesome. Thank you very much for sharing that. And I know that from reading your bio, I realised that we actually had something unique in common, and that we both got married because of a need to move for a job.
Liz Mason: Indeed. When I was 23, I got offered that position in the National Tax Group, which happened to be in Phoenix, Arizona. And at the time, I was living in Reno, Nevada. I was engaged to my now husband and I forgot To tell him that I was up for this promotion and position in a different city that I had never been to.
Liz Mason: And so I got the offer and accepted it on the spot, because I was so excited about it. And then I went home to him and said, “Hey, so I’m moving to Phoenix next month. Do you want to come?” Of course, that was a little bit of an argument. I ended up moving my start date back six months planning a wedding and getting married about two weeks before we moved.
Heather Smith: My husband, well my boyfriend, it was boyfriend, just absolute boyfriend was on the Tuesday offered a job in Singapore. We were living in England at the time. On the Friday, I asked him to marry me. On the next Tuesday, we got married. And then on the following Friday, we flew out to Singapore.
Liz Mason: That’s amazing.
Heather Smith: I think that was a week and a bit turnover.
Liz Mason: Yeah. No, that’s amazing.
What’s the startup and small business culture like in Arizona?
Liz Mason: Yeah. So, it’s a really interesting mishmash, which I love. We have a lot of people that have come in from California, so Silicon Valley being the biggest tech hub in the US, second to New York, I would say. We have very many people that move over from California, so there’s a lot of technology startups.
Liz Mason: There’s a really good culture around people that are … I don’t want to say transient, but maybe didn’t grow up in Phoenix. And so in Arizona, in particular, there’s a lot of openness, and so people are very willing to help. And one of the things I love so much about the community that we live in is that you could basically call any CEO of any company based in Arizona up on the phone and say, “Hey, I’m really interested in what you’re building, would you be willing to go out to coffee with me?”
Liz Mason: And maybe not right now due to the COVID restrictions, but in a normal environment, they would absolutely meet with you for coffee no matter what. And being like me and that I’m a little bold and a little outgoing, I was able to make some great connections really quickly just because I asked.
Heather Smith: Awesome. It sounds like a sensational small business and startup culture there.
Liz Mason: It really is.
Heather Smith: My husband is fascinated by Arizona iced tea.
Do you drink Arizona Iced Tea a lot?
Liz Mason: I actually find it far too sweet for myself, but …
Heather Smith: Cool.
You like to use the hashtag, CPA world domination. What does #CPAworlddomination mean?
Liz Mason: I do. Yeah. About seven years ago, I launched High Rock Accounting. And in the process of launching High Rock, I realised that there was this whole subculture in the CPA community in particular where people were not utilising their degree to help and they weren’t growing things. They were getting stuck in almost dead end accounting jobs or not getting promoted inside of firms, because they wanted to have a family or other things that didn’t lend itself well to 90 hour work weeks.
Liz Mason: And so I wanted to demonstrate to the younger generation of CPAs that there are paths for excited young professionals to take that lead to world domination. That this certification can actually help launch your career that doesn’t have to be a dead end job. It doesn’t have to be going into corporate accounting and staying an accounting manager or staying a senior manager in public accounting if you’re unable to get through that partner promotion.
Liz Mason: And it could mean a whole bunch of different things. And so I went out and I interviewed five to start amazing CPAs that had incredible trajectories and career paths. One of which who was running a private equity fund and had … He told me I think seven private jets at the time that we spoke and his career was humble background. Went to a state university and then started his CPA path at a small public accounting firm and was able to do this with his knowledge.
Liz Mason: I talked to another guy who was running one of the big four accounting firms, and that was an amazing story as well that he was able to get to partner and push through and actually get up to the national managing partner. So anyways, I went through five of them and I wrote their stories down and then I did a series of presentations about what CPA could mean, and how the path could change for people.
Liz Mason: And I think that opened my eyes as well and taught me that this is a really great background to build any kind of business from. I resonated well with the research that I did, and the people that I spoke to and the way that I was able to present it at different presentations for national conferences.
Liz Mason: Here, we have the American Institute of Certified Public Accountants that does phenomenal conferences every year. I was able to present it a few times at those conferences, and then two different US state societies of CPAs. That hashtag followed me around and I think also resonates well with my plan for future world domination.
Heather Smith: Absolutely. That’s such an inspirational story. I’m really big into I think we need to make sure that the schools and the universities are educating the upcoming students about what is possible, which sounds like you’ve kind of took the bull by the horns. Even though they’ve got to that accounting level, trying to continue so much opportunity in accounting.
Liz Mason: There absolutely is. We know the lifeblood of business. We can absolutely take over the world.
Heather Smith: Absolutely. And an interesting fact, a third of billionaires, self-made billionaires’ parents, one of them was an accountant.
Liz Mason: Wow, that is an interesting fact. I also have a parent that was an accountant, so a future billionaire right here.
Heather Smith: In the making.
Can you explain the Japanese philosophy of Kaizen?
Liz Mason: Yeah, absolutely. So, Kaizen to me is the continuous improvement, right? And so the Japanese have done an excellent job of culturally ingraining in their people that everybody can be better. Society can be better. Each individual can be better. And even equipment could be better. You should slowly improve everything around you and have the foresight to think about growth and opportunity in all different directions.
Liz Mason: I’ve adopted that very close to heart and that what we do in each thing that we release might not be perfect, but it can always be better. And I work with my team frequently on how do we up ourselves? How do we grow together? How do we learn together? What can we do to make this one step better?
Liz Mason: And I found that over the years with that mindset of continuous growth and improvement, we’ve had the ability to get people through change much faster. We’ve had the ability to open eyes and see what could potentially be without it being a challenging environment, which unfortunately I find in today’s culture, it’s difficult to promote the next thing, right?
Liz Mason: So, if you say, “Hey, you can be better. Let’s work on this.” People take offence and they get … Before they start seeing the potential, they get defensive. And the change part of it is difficult, and so if you have this mentality and you start switching mindsets early into thinking about how it could be better, people stop taking offence and they stop getting defensive at all and they start focusing on potential and possibility.
Heather Smith: That’s really interesting. Thank you very much for sharing that list. So, you’ve launched that this is just astonishing for people listening. You’ve launched four successful brands in the accounting, tax and HR space. High Rock Accounting, Rebel Rock Accounting, tackle HR and the tax department. You’re the strategic editor for Tax Practise News, and you’re a prolific writer. Now, probably first people want to know is do you ever sleep? But secondly, you have such giant goals and such creative ideas.
How do you actually manage to juggle so many big projects?
Liz Mason: I have the best people. I have nothing without my team. I have good ideas and I have vision, and I do have creativity and innovation, but I don’t have the ability to do it all and nobody can. And so I focus very heavily … Have you read the book Traction?
Traction – Get a Grip on Your Business by Gino Wickman, plus further readings: Integrator + Visionary
Heather Smith: No.
Liz Mason: It’s a great book to read, but I don’t necessarily agree with the entire ecosystem that they put out, but I do agree with the way they define terms. And I think power in understanding terminology and words around things makes things clearer and helps people to see the way, the path to something.
Liz Mason: Two words that they utilise in that book frequently are visionary and integrator. I am a visionary and I have integrators on my team. And the integrator role is they’re truly the ones that are doing the hard work. It’s where I lay out the vision in a creative path for what I think should happen, and they make it happen.
Liz Mason: They make sure we get the right people in the right seats on our team. They make sure people are executing against our project plan, and they keep people accountable. Well, that gives me the opportunity to be creative and go write things and go speak at conferences and pursue the passions of growing the different brands and figuring out what to do next with that, and how we can be better.
Heather Smith: Awesome. Okay, thank you very much for that. I’ll search and include the notes, Traction, the book that you mentioned there. So, it’s interesting because I was going to ask you that you do have the quote on your website from Simon Sinek. We can’t all be good at everything, but you actually do so much.
Simon Sinek. We can’t all be good at everything.
Liz Mason: I’m not good at everything, and I identify the things I’m not good at, and I backfill. I’ve taken that mentality and pushed it across our team. I don’t know if you were on, a few weeks ago I did one of the Accounting Salon presentations, and I talked about the Vagina of Amazingness and I set people worldwide off on Twitter, which was a lot of fun for me because the point of that was to get people to remember the concept.
Liz Mason: And the concept is that people should focus on what they’re excellent at and what they love. And if you think about it like a Venn diagram where those two things overlap is where you should be focusing. That’s what I call a choose your own adventure mentality. We have fully embraced that choose your own adventure and the build your own adventure mentality inside of team world domination as we like to refer to ourselves.
Heather Smith: Very good. Well, if we circle forward to the talk that you did give at Accounting Salon, which was around pricing for modern practices. It was around measuring your value.
How do you measure your value and how do you set the right price?
Liz Mason: Yes, that is an incredibly long conversation that we could have. From a high level perspective, I always value bill. And what I mean by that is I figure out what the differentiator is and what we’re providing and what the value of that service is to the end user.
Liz Mason: And so I don’t do fixed fee, which very many people confuse with value billing. I don’t have a pricing menu where people can pick the services that they want, and it’s always the same price. It very much depends on the type of business, the industry, the business owners, their needs, the type of communication that they want, and also what we’re doing for them.
Liz Mason: So, let me give you a good example here. I do a lot of consulting on business models and profitability. How to make something profitable that not isn’t necessarily profitable from the get go. I build out models for people, so that includes everything from the pricing model to how you actually do this internally, to the cost structure, to the compensation model of the people that will implement this.
Liz Mason: And all of that work is I could technically bill hourly and I would be offended to bill hourly because I have spent so many years studying every possible business model, books about this. I read books in my spare time about how to create an interesting business model. What does it look like to approach new things?
Liz Mason: The hourly billing doesn’t quite work for me and fixed price. I could put together a fixed package price. But again, they’re getting way more value than just a couple thousand dollars. And so, I had a big … I did this for a client, and they ended up selling the company for close to $50 million, and I got maybe over the life of the engagement, 100,000 in fees over five years and I sat back and said, “That’s not a fair trade. I built their business model. They would not have been profitable without me.”
Liz Mason: And so, I took a step back and said, “How do I do this better?” And to me, give me a kind of equity. Give me 5% equity and a small consulting fee just to cover time and materials from the low end. And when the companies succeed, and it will, because I’ll make sure it does, I get a cut of the sale.
Liz Mason: And so we started just changing the way we’re pricing and getting creative with what that looks like and what we ask our clients for. I think, because I am able to do that well, people see the value in it, and it’s a much more interesting conversation than, “Here’s your bill, pay my hours and be done.” Right?
Heather Smith: Yeah, absolutely. I think when you started talking about that equity model, you also broke the Internet, and there was a lot of conversations around that too. What I love about you is you throw out these ideas that are like, “Oh, we can do it like that?” I really love how you just shatter everything and just think of a new way to do something.
Liz Mason: I blame my parents for that. They both come from a very different political spectrum. We spent most of my childhood at dinner having them debate the different layers of politics. Yes, it’s a very contentious political environment and they are on complete opposite spectrums, but both of them taught me through that process to question everything and never believe assumptions or what other people tell you. You have to research it and you have to understand it for yourself.
Liz Mason: And so I’ve never been capable of listening to someone say, “This is the traditional model, this is what you should do,” and then doing it, because I have to validate it for myself. And if I can’t find a solid reason behind it that, that’s the way that it’s done, I’m going to throw it out and do it how I want. Which is kind of insane when I say it out loud, but seems to be working so far.
Heather Smith: You examine it and you question it and you push it out there. And it is interesting that, that kitchen table discussion sounds like it was quite challenging. Were you a part of it or are you just an observer?
Liz Mason: As I grew up, I was definitely a part of it, and I always asked questions even as a little kid. I would ask why and why my dad had those opinions that my mom thought were atrocious, and what that looked like. And sometimes he tends to argue just for the sake of arguing, so I think I’ve picked up that habit as well. And that I will love a good academic debate and I will be devil’s advocate all day long just to continue the debate and get people’s minds thinking.
Liz Mason: At the same time, growing up, I definitely continued to figure out what I did believe in and support those positions, and then argue it with them in that safe environment where at the end of the day, everybody loves everyone and will treat us with respect, but we’re able to express opinions and figure out how to do that appropriately.
Heather Smith: Yeah, that sounds really good. One of my mantra starting 2020 was if we’re going to get through it … This is before anything had really happened was that I had to have a really open mind and really listen to people and break it down and understand where they were coming from and still respect them even if I disagreed with them. So, it sounds like that’s kind of what they brought you up with.
Liz Mason: Yeah, exactly. Underlying, there’s always the feeling generosity and love. And over that, you can say in an academic debate whatever you want, as long as you’re not personally attacking someone for their beliefs.
Heather Smith: For listeners listening in, Liz and I are both part of Accounting Salon, and that was one of the spirits of Accounting Salon was that sort of open mindedness and people with vastly different opinions coming along, but with that generosity and that focus on modernising and efficiency.
Liz Mason: Absolutely.
Heather Smith: One of your businesses is called Rebel Rock, which helps cannabis companies implement customised accounting solutions, improve business efficiencies and plan for short and long-term growth.
Why is compliance around the cannabis industry so complex?
Liz Mason: Yeah. In the US in particular, there is a varying level of legality. At the state level, and not all states, but many states have legalised cannabis or marijuana consumption for either medical or recreational or both.
Liz Mason: Now at the federal level in the US, we are still completely illegal. So, the state governments technically have authority over their own states, but the federal government also has authority, so it’s a battle. And so that creates a really interesting compliance environment, because from the federal level, if you look at what they consider illegal drug trade, we have a code section called 280E, which limits their ability to deduct business expenses, because technically they’re engaged in federally illegal business.
Liz Mason: So effectively, all of the gross revenue gets taxed for these companies. And so there’s a lot of planning around that from a tax perspective to try and move this revenue outside of the entity that touches what’s called the flower or the actual cannabis plant.
Liz Mason: Now in Canada, it’s been completely legalised from a recreational standpoint, however, they’ve only legalised flour. There’s all sorts of extracts and tinctures and oils that you can make that are helpful from a medical medicinal purpose as well, and that isn’t available in Canada. And also, there’s a supply and demand issue.
Liz Mason: In the US, you can only ship between in the state. You can’t go over state borders and you can’t ship to Canada. Canada doesn’t have enough product, but they can only ship from internally to Canada. And so it creates this really crazy thing happening in North America. And then you have Mexico that’s about to legalise. And then you have the Mexican drug cartels that are freaking out about this and killing people.
Liz Mason: That’s always really interesting as well. And then we have some clients that are working on medical in other countries as well, so we’re looking at different European entrances. We work with CBD companies which are cannabis oil, so technically that does not have the THC in it, which is what makes you high, but it does have medicinal properties as well.
Liz Mason: And there’s certain levels of THC that’s allowed. It’s normally 0.02% to be transferred to other countries. And other countries are testing it when it comes in, and if it has over that percentage by their test, which might different from the laboratory here in the US or in Canada, people get arrested.
Liz Mason: And so it’s this crazy international phenomena where we are slowly seeing legalisation on a large scale across the world yet the regulations are so strict and so structured that it creates these micro economies of business that you have to understand how it works to really be profitable.
Heather Smith: It’s just fascinating. It’s unbelievable and fascinating that the regulations lay across like that. I don’t understand, how does Canada get into Canada? Because surely, it’s not warm enough to grow there.
Liz Mason: They actually issue licences inside of Canada and they’ve done some of the world’s foremost research on internal growth and so they grow in big warehouses.
Liz Mason: Yeah. They’re completely temperature controlled. They have these giant HVAC systems that are actually recirculating and filtering internal air. They segment the rooms even. They have lighting systems and some of them are growing in layered grows as well. And there’s also hydroponics, which is being utilised internally there.
Liz Mason: It’s pretty amazing the technology and it’s also amazing to see the agriculture technology start adapting to a more fast paced industry and companies that can afford to pay for that stuff. Because when you look at a large scale agriculture in North America outside of cannabis, there’s no money in it, and so nobody has really tried to innovate. Very small micro innovations or universities that have been working on things, but nothing on the scale of what cannabis is doing in the agriculture.
Heather Smith: It’s really interesting because it does sound like it’s really pushing innovation and technology because I used to live in Canada. We had wine that was called ice wine because the grapes would actually freeze for the part of the year.
Liz Mason: And it’s great. I love ice wine.
Heather Smith: That’s just so fascinating. One of the things happening here in Australia at the moment is all the borders are shut down and we can’t get imports in, so I just see an increase in manufacturing happening here in Australia. It sounds like those regulations are pushing the increase in innovation and manufacturing in different areas.
Liz Mason: Indeed. And so with Rebel Rock, we’ve been entering the Australian market as well. Because it is medically legal and then Canberra is the only city where it’s actually recreationally legal kind of. It’s an interesting legislative ruling if you look at it.
Liz Mason: But what we found was it’s also incredibly difficult to get prescriptions for medical marijuana inside of Australia. You have to go through your primary care doctor. It’s extremely expensive upfront and then getting a prescription.
Liz Mason: In the US, you can get and a gummy for example, an edible. It would be about 10 milligrammes is average of THC in a gummy. The amount of THC you’re able to get in an oil there, so a tincture is like 0.5 milligrammes.
Heather Smith: Oh, okay.
Liz Mason: Yeah. So, it’s very different scale of what is happening and what’s legal.
Heather Smith: Yeah, absolutely. I think you referenced Canberra, which is the capital city of Australia, but Canberra sits in a territory called the Australian Capital Territory, which is this tiny little boundary around Canberra. So, it’s possibly that, that specific territory is where it’s legal, which is exactly the same thing but that would be what it’s happening. It’s not just there’s one random city where it’s legal, because you couldn’t do that here in Australia.
Liz Mason: Interesting. Yeah.
You’re launching a new programme called Nucleus. Can you explain what that is?
Liz Mason: Yeah. Nucleus is everything I would have wanted when I was a young manager inside of public accounting thinking that there has to be a better alternative. I am, as you know, an ambitious, bold, crazy human and I was looking at this path to partner going, “Okay.” I’m sitting here. I was one of the youngest managers in the US at 24.
Liz Mason: I saw this 15 year path in front of me to make partner and thought that was insane, because everybody I saw was working 90, 95, 100 hours a week. Many of them were divorced, didn’t know their children very well or had strained relationships with their family. And I’m a very family oriented person and I didn’t want that for my life.
Liz Mason: I also love travel. And two weeks or three weeks of vacation a year was not acceptable to me. I used every single second of every vacation I was ever given and I got crap for it. People would tell me that I wasn’t performing at work, even though my billable hours were higher than other people and my profitability to the firm was higher. It didn’t matter if I left. They assumed I wasn’t working.
Liz Mason: Anyways, long story to say, I wanted something better. And what I really wanted was a programme. Something that would teach me to be a really good partner, something that would teach me to build my own book of business. And I couldn’t find it. I couldn’t find anywhere that I could go in and learn the ropes and build a book of business and own my own business without extreme pain.
Liz Mason: And so I ended up jumping and going through the extreme pain and learning how to do this and making a lot of mistakes in the process and getting better for it, but I wanted to share that knowledge in a meaningful way.
Liz Mason: And so Nucleus is incubating baby CAS firms, so client accounting service firms. People that want to do controller services or CFO level services and don’t necessarily have the skills to run their own business don’t want to go through all of the bookkeeping and the basic accounting work to get to the point where they can hire someone to do that for them.
Liz Mason: They don’t want to spend the three to five years just grinding to get to the point where they have true freedom. And so that’s what Nucleus does. We’ve built both a training programme that takes them from effective manager, a senior manager to full partner and entrepreneur within a year.
Liz Mason: And from there, we give them coaching and we help them land leads. We do the advertising on their behalf. We give them our High Rock branding, and we let them operate as a partner in High Rock, and then we give them access to our entire bookkeeping staff.
Heather Smith: Wow, that’s amazing. That’s really an interesting concept. I like the baby firms.
Liz Mason: Yes. In my head, we are helping these entrepreneurs. Obviously, they have to pay for some of it, but this isn’t a model that’s going to make me rich, but it will make me rich in terms of helping other people. And that’s what really motivates and drives me forward.
Heather Smith: Yeah, absolutely. And community building within the industry comes back to you. It goes out, it comes back, it goes out, it comes back. Another topic that you’ve spoken about is how to creatively compensate your team. I’m interested in what your thoughts are about that. I’m interested in anything more that you have to say about building an amazing team, which you have spoken about.
How do you creatively compensate and build amazing teams?
Heather Smith: But I will mention to people listening in the caveat is that Liz is based in the states and regulations around compensation may be different for people who are listening in. Because I know sometimes they freak out when you say things. They’re like, “Oh, we can’t do that where we are.” But I think it’s good to hear what can happen within the States, so we’re better informed to shape what happens in your own part of the world.
Liz Mason: Yeah. In the US, we do have a lot of freedom in how we compensate people. Our minimum wage is ridiculously low, which I am absolutely against. However with that, I can do a lot of creative things. And so, I had this realisation moment one day when I was working with my team and I brought in a new client, a nice, big, exciting client in a cool industry. It was a biotech startup, and they were building interesting devices.
Liz Mason: And so there was all sorts of accounting complication. They were manufacturing in China. They were importing. They were also selling a service and a software, all sorts of interesting pieces. I came in so excited telling my team about this. And a few of them just kind of sat there like … And I said, “What’s that about? Why are you not excited about this? The firm is growing. We got a cool new client.”
Liz Mason: And basically the answer was, “Well, it doesn’t affect me positively. I have to do more work and I don’t get more pay, and it just sounds stressful, so why would I get excited about that?” And I said, “Oh crap, I have motivated my team directly opposite from the way that I price my engagement.” So, we’re doing complete value billing, and then we’re paying people either hourly or flat salary. And that doesn’t align. The incentives didn’t align to the firm model.
Liz Mason: And so I threw it out the window and within two weeks, completely changed our model and freaked my entire team out. I don’t recommend changing compensation models with two weeks notice, that’s terrible idea. I learned that lesson, won’t do it again. But overall, it was a huge success. And so what we did was we gave everyone a base salary and the base salary is truly there for teamwork. Making sure that they’re helping train other people on the team. They’re being available. They’re in it. They’re part of this.
Liz Mason: And then on top of that, we pay a percentage of the revenue that they’re performing on. And so if they’re assisting, they’ll get 5%. If they’re preparing, they get 10%. If they are reviewing, 15. If they’re a controller, 20. And if they’re a CFO, 60. And we have different pieces built in for consulting engagements and how that splits out depends on how many people are needed on each individual engagement.
Liz Mason: But the end result was everybody on the team ended up making more money and being more efficient. And the efficiency piece of it was what made me so happy. It was because they realised if they could take on more clients, they could make more money.
Liz Mason: And so they started innovating and thinking about processes in ways that they never had. I was the one previously that would go to them and say, “Hey, we need to fix this process. It’s broken. We shouldn’t have manual pieces here. Let’s automate it.” And all of a sudden, they were coming to me and saying, “Hey, I think we should implement receipt income on this client because they’re sending us a tonne of stuff through email, and it’s escalating because they’re growing.” Or they’d come to me and say, “Hey.”
Liz Mason: Every month, I have to download the CSV from this old school payroll provider and upload it in as a journal entry. Can we automate that? I’m going, “Yeah, we absolutely can. We can push it into a Google Sheet and pull it through Zapier.” It just made our team in total over one year from the date I made the change 40% more efficient on projects.
Heather Smith: Wow. 40%, that’s incredible.
Liz Mason: Yeah, it was insane. I had on my plan that we were gonna have to hire a new person and then we didn’t. All of a sudden everyone had capacity and wanted to take on new clients.
Heather Smith: That’s sensational. Hopefully, it gives people something to think about with their own models. And I do like the correlation between the way that you price your engagement and then pay your staff and having some tie in there whatever it may be, does make sense.
Liz Mason: Yeah. And there’s two other things we did that were really important to this model being successful. We added 5% of revenue. If someone brings in a client themselves, they get 5% of revenue for the life of the client and the tenure of their employment.
Liz Mason: And so that created an environment where people wanted to sell and bring in clients because they get residual income. They don’t even have to be working on the client to get that revenue share. And then the second piece of it to make it all work was we put in place a quarterly bonus of 15%. And that bonus is only paid out if people are meeting all of their deliverables and the clients are happy.
Heather Smith: Yeah, that’s sensational. Thank you for that. It’s interesting, because I’ve been talking to people whose businesses are struggling through this current pandemic and financial crisis and saying … They’re not the owner, but saying, “Why don’t you put stuff out there and go and engage with people to potentially drive business into the company?” And it’s like, “But that’s not my role.” And it’s like, “Yeah, but you could do little things. You can make sure people know what you do, et cetera.” “But it’s not my role.” That sort of just buys in ownership over the whole company by doing something like that.
Liz Mason: Absolutely. And I also give them the 5% on upsell, so if they’re working with a client and they’re able to take them from a bookkeeping client to a full controller service client, they get a percentage of the upsell revenue. So, the difference in the new engagement versus the old.
Heather Smith: I can’t imagine what your spreadsheets are like trying to calculate the remuneration.
Liz Mason: Yeah. We have pretty much everything automated through a bunch of Zapier through Google Sheets right now. I’ve actually been working on this because I’m trying to automate it further in terms of pulling in our time sheet data, because we do track time, so our individual team members can measure their own profitability and push back on clients if they need to raise prices. But from that, I should be able to gather who’s working on what, when, and be able to automate this completely.
Liz Mason: But right now, through a series of Zaps, it pulls in every invoice line item, and then it pulls who’s assigned to that client for that particular type of project into a spreadsheet and then does all the calculations for us and then pushes out into numbers that we can put into Gusto, which is the payroll provider we use here.
Heather Smith: Wow, that’s intense.
Liz Mason: It’s a multi step Zap. It took me a little bit to figure out how to do it, but I got it.
Heather Smith: Yeah. That’s sensational. That’s what you want.
Liz Mason: Absolutely.
How is your business or your businesses navigating the COVID-19 pandemic?
Liz Mason: We are stumbling as I think everybody is. At the beginning of the pandemic, I told our team, “Be kind to our clients. Assume that everybody is panicking right now. If somebody calls you five times, don’t be a mean person about it. Answer the phone, call them back and have kindness and ask what you can do to help.” And I very clearly told our team, “This is not a time to sell. This is a time to support and be the trusted advisors that we truly are.”
Liz Mason: And here in the US, we have some government stimulus, which I know you do in Australia as well. That’s very confusing. And the rules keep changing. The guidelines keep changing. Nobody knows like up from down, right from the left what’s really happening. And I’ve made a point myself to keep on top of it and attend as many webinars and read all the research, all the guidance that’s coming out to keep my team apprised so that they can advise our clients best.
Liz Mason: And we created a little spreadsheet as to, “Have you reached out to this client? Have you talked to them about this programme? What’s their decision? What can we do to support them? How do we help them through it?” And through that, I think that we’ve forged some deeper relationships with our clients than we ever would have without this pandemic.
Liz Mason: We unfortunately did have a few clients that had to shut down and pause services and hopefully at one point, they’ll be able to reopen. Not sure at this point. But we also had a few clients hire us for extra services or consulting or push things and agree to bigger projects than they ever would have before. And I think that our team is starting to see the benefit of generosity and what that does in the long-term and that has been heartwarming to me.
Heather Smith: Oh, that’s lovely. The benefit of generosity. It has been interesting seeing how some businesses have been able to pivot and increase and get rid of the fat in the business, et cetera.
What’s something that you’ve learned from working from home over the last couple of months?
Liz Mason: I am terrible at multitasking, I have learned that. I have a three and a half year old little boy who is hyperactive and smart as a whip, and a pain in the butt, and also extremely social and he constantly wants to have attention, which I get. I like having attention too, but I’ve had to work from home and my husband is a police officer, and so he still goes to work every day. So, first responder, he has to.
Liz Mason: And so four days a week prior to last week, I had full-time child and full-time work. More than full-time work and I was barely sleeping. I was sleeping for maybe five hours a night if I was lucky. I drove up to my parents house who lives Reno, Nevada. So, it’s about a 12-hour drive from Phoenix. And this last week and a half, I’ve been here and they’ve been watching him during the day so I can actually focus on work.
Heather Smith: Oh, that’s wonderful.
Heather Smith: So, your borders weren’t shut down for a start? But that’s wonderful that you’re able to do that.
Liz Mason: Internal US, you can travel wherever you want, which is terrifying, but also gave me the freedom to come here.
Heather Smith: Yeah, absolutely. Yeah. No, I can’t travel two hours South.
Liz Mason: Yeah.
What are some technology tools that you’d like to use either at work or personally?
Liz Mason: Yeah. We are Xero firm. And we utilise that as our core general ledger and then hooking a bunch of super cool tools. One of the things that I’ve been doing lately is having a little AI bot listening to my Zoom meetings or my phone calls and then transcribing information for me.
Liz Mason: I use one called Voicea, and the little bot’s name is Eva, and I love Eva. She’s my favourite tool, because I don’t have to take notes. She takes them for me. She can highlight things. If I have specific code words in there when people say that, it auto highlights those things. And so I have like a list for prospect calls and a list for other calls and what that means.
Liz Mason: If I say the word deliverable, she bullet points everything I say after that. I can have trigger words in there to send tasks to my task manager, as well as follow-up emails. I can even ask her to schedule a follow-up meeting with somebody on the phone. I can say, “Okay, Eva, schedule a meeting with Heather in two weeks at 2:00 PM on whatever timezone we feel like talking in.” And so that tool is my absolute favourite current tool that I’ve been using. I have been using.
Liz Mason: Yeah. Super great. And then personally, I love playing stupid video games on my phone. I’ve been playing the Star Trek game lately, because I’m a giant nerd and Star Trek is probably my favourite show. Well, it depends. It’s either Star Trek or Doctor Who.
Heather Smith: I had the Doctor Who screensaver behind me before.
Liz Mason: It’s phenomenal.
Heather Smith: Who’s your favourite Doctor Who?
Liz Mason: It’s so hard. I really do like the current one, but I think I’m partial to Matt Smith.
Heather Smith: Oh, really? That’s new. There you go. Thank you for sharing that.
Liz Mason: Of course.
What’s next for you Liz?
Liz Mason: So many things.
Heather Smith: So many things?
Liz Mason: Yes. First off, hire out, just opened an office in Australia, which is really exciting. We’re going to grow that market with the aim of coming in as Rebel Rock and helping in the cannabis industry there, especially since it’s blossoming as we speak. We have a lot of depth of knowledge there in other parts of the world that I think we can lend a hand and be truly helpful on the advisory side.
Liz Mason: On the cannabis side, we’re also doing a lot of deal making. We’re working with lots of international investors and helping them find places for their money. And so we’re working on both sides. We have a group of investors we work with. We have a group of cannabis companies that we work with. And from the cannabis company side, we get all their financial statements in order.
Liz Mason: We do the due diligence preemptively before we even bring the deals in front of the investor side. And then on the investor side, they tell us how much money they have to deploy and what they’re looking for the mix of assets and we find the deals for them and make those connections.
Liz Mason: And that’s been extremely lucrative and fun. Also, working with a bunch of international investors that has been eye opening and interesting to understand where people are in different parts of the world and what that means to them and the types of investments they’re looking at elsewhere.
Liz Mason: Many of these are real estate backed, because in order to grow, you kind of have to have some real estate. So, that’s also really interesting to learn real estate laws in other countries.
Liz Mason: From there, so on the Rebel Rock side, we plan to expand that as well as do all of the outsourced accounting for people and truly be their business partner in that. And then on the High Rock side, after Nucleus, they were working on … We were supposed to have a makeover, but we’ve pushed it back due to the pandemic to start our Nucleus programme and get those partners involved.
Liz Mason: We will likely push that back to July, although we haven’t set the official date for the first class yet, and then continue moving that forward. On top of that, we’re launching a programme for Graceful Exits. And so, one of the problems we’re dealing with frequently in the US is we have an ageing population of accountants and they don’t have anywhere to leave their book of business.
Liz Mason: And so there’s two major options. One of them being hire a manager level person, so someone with 5 to 10 years experience and train them. Train them with your business and let them move up to partner and take over and hopefully buy you out at the end.
Liz Mason: And the second option is just a flat sale. Because of the shortage of the manager level, most people have been pushed into the flat sale. And as I’m sure you know, many accountants are not the best at planning for their own retirement, even though they’re excellent at planning for all of their clients retirements.
Liz Mason: And so they’re forced into selling their businesses and generally leave the multiple on revenue isn’t good enough to truly sustain them through retirement. And so we’ve built a model that will effectively take these retiring accountants and move their books of business into the High Rock family, and it will be a five year employment contract. And the first year the full-time and then we’ll step it down until the last year, they’re working one day a week.
Liz Mason: And then over the following 10 years, so for that five years, they get a 10-year payout. And the payout will be a percentage of the revenue that stays with the firm over that period. And so, they have a 15-year retirement built in to that programme.
Heather Smith: Wow, that’s very interesting.
Liz Mason: Thank you.
Heather Smith: That’s an amazing model. Well done you. And giving people who want to sell some comfort in where they’re going.
Liz Mason: Yeah, absolutely. And, it matches very well with the Nucleus programme, because as we bring in these new Nucleus partners, we’re going to need books of business for them, and so that helps us match the right people at the right time.
Liz Mason: I truly believe that our profession is going to very strict industry verticals and specialisations and helping companies versus location based services. And so with the Nucleus programme, every individual Nucleus partner will be focusing on a different industry and they will have their specialty based on their history and what they enjoy, what they love and what they excel at and where that overlaps, and they’ll be focusing there.
Liz Mason: And so we’ll be pulling in firms into the Graceful Exits programme based on that. And so finding the matchmaking so to speak, and being able to grow our brand and help people in the process and give alternatives to what’s happening.
Heather Smith: Yeah, that’s sensational. What a brilliant idea.
Liz Mason: Thank you.
Is there anything else you’d like to share with our listeners, Liz? And how can they get in touch with you?
Liz Mason: Yeah. Twitter is the best place to find me, because I’ll actually respond to direct messages and I’m terrible at email. My Twitter handle is @lizzynorma, and feel free to ping me there. And then also follow High Rock at @highrockcpas. It’s our main Twitter handle. You can find me on LinkedIn as well and I’m always happy to chat with people or answer questions or help any way I can.
Liz Mason: To circle back to one of your original questions about the Phoenix community and the startup community and the business community. One of the things I learned early on is that I end every meeting with how can I help you. What can I do for you? And that’s the generous spirit of where I come from and where my business is based, and I love it. So Heather, what can I do to help you?
Heather Smith: Well, you’ve helped us immensely. Everyone who’s listening into the show will really benefit from the diverse information that you’ve shared here. So, really appreciate you being on the show and your time today. And how can you help me? When I wrap it up, I’ll send the link over to you, you can share it with people in your community. You’d also enjoy it.
Liz Mason: I would be happy to and I sincerely appreciate being on the show. You are one of the amazing humans that I idolise in this industry, so this is a real treat for me.
Heather Smith: And quite funnily enough was that I remember the first time I met you and I was like, “Yo, Lizzy.”
Liz Mason: Yeah.
Heather Smith: We sat together in fact the first full day of Accounting Salon. Sat together for the first few days, but that was amazing. So, I did miss seeing you here in May, which was very …
Liz Mason: Yeah, me too.
Heather Smith: But I thought I’d make an effort to try and interview everyone and go through.
Liz Mason: It’s fantastic.
Heather Smith: I want to make out for a little bit. But thank you so much for your time. Really appreciate having you on the show.
Liz Mason: Thank you.